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General Machinery Hire Ltd v Chief Executive Officer of Fiji Revenue and Customs Authority [2011] FJHC 805; HBJ03.2011L (15 December 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION


Civil Action No: HBJ 3 of 2011L


BETWEEN:


GENERAL MACHINERY HIRE LIMITED


: PRAUSHILA DEVI SINGH


: ALVIN KUMAR SINGH


: AJNIL KUMAR SINGH
Applicants


AND:


CHIEF EXECUTIVE OFFICER of FIJI REVENUE AND CUSTOMS AUTHORITY
Respondent


JUDGMENT ON APPLICATION FOR LEAVE TO APPLY FOR JUDICIAL REVIEW


Judgment of: Inoke J.


Counsel Appearing: Mr C B Young (Applicants)
Mr B Solanki (Respondent)


Solicitors: Young & Assocs (Applicants)
In-house solicitors (Respondent)


Dates of Hearing: 12 December 2011


Date of Judgment: 15 December 2011


INTRODUCTION


[1] The applicants apply for leave to file judicial review proceedings out of time and leave to apply for judicial review.

[2] The applications arose out of a deed of settlement signed by the parties for payment of outstanding taxes payable by the applicants for the years 2000 to 2007.

[3] When the applications were filed on 15 August 2011, the respondent had issued Departure Prohibition Orders and Garnishee Orders against the applicants. However, by the time the applications came to be heard, those orders had been withdrawn by the respondent so they form no part of this judgment.

THE BACKGROUND


[4] General Machinery Hire Limited has been engaged in the freight and cartage business since 1983 from Lautoka. The other applicants are the directors of the company being the mother and her two sons, respectively. Following an audit of the respondent's tax affairs, the respondent issued Notices of Amended Assessment to the company on 4 May 2010 and to each of the directors on 21 May 2010 for the tax years ending 31 December 2000 to 31 December 2007. They were assessed with additional income taxes and penalties. The parties then entered into negotiations eventually coming to an agreement contained in a deed of settlement which they executed dated 9 July 2010. The deed provided for periodic payments with full settlement on 15 December 2010. It also provided for review by 31 October 2010. However, the respondent's representative was not able to meet with the applicants on that day so further arrangements were entered into for that review. They met on 25 November 2010 and the representative agreed that they would further "meet and review all arrangements on 24 February 2011". However, on 11 February 2011, the respondent wrote to the applicants stating that "in view of your default in the payment of taxes due 25% late payment penalty has been charged under the provisions of s 44 of the Tax Administration Decree" and demanded payment of income tax and VAT arrears and penalties. The applicants continued to make payments towards the tax and penalty liability throughout this time including a payment on 24 February 2011. The respondent then faxed a letter to the applicants on the afternoon of 24 February 2011 (the letter was dated 25 February 2011) stating that they had breached the deed of settlement and that the respondent "will no longer comply with the deed since it is null and void of any legality soon after the company breached (the) clause (for full settlement by 15 December 2010). Therefore the audit of your company directors for the years from 2000 to 2007 and thereafter will continue from now". The applicants then tried to contact the respondent's representative and a meeting was arranged for 1 March 2011. That meeting was postponed to the next day. They met on 1 March 2011 and further agreed to meet on 10 March 2011 but did not resolve anything. On 16 March 2011, the respondent wrote to the applicants reaffirming its earlier position that the deed was null and void as far as it was concerned. The applicants continued to make payments and the respondent, pursuant to garnishee orders, obtained payment from the applicants' bank accounts in March, April and May 2011. The applicant's previous solicitors wrote several letters to the respondent in April and May and the applicants' accountant and solicitor met with the respondent's representative on 31 May 2011 but were told that no further discussions would be entered into in respect of the deed of settlement. The applicants now say that they have overpaid the amount due under the deed by over $100,000.

THE APPLICATION TO EXTEND TIME


[5] The applicants seek orders of certiorari to have the respondent's decision removed and quashed by this Court. Under O 53, r 4(2) of the High Court Rules 1988, the time limit to apply for leave is "3 months after the date of the decision".

[6] It is my view that the relevant decision is the one conveyed to the applicant's representatives in the meeting of 31 May 2011. That means the three months period expired on 1 September 2011. The application for leave was filed on 15 August 2011 and is therefore within time.

[7] Even, assuming that the relevant decision was the revocation of the deed of settlement by the letter dated 25 February 2011, the applicants were out of time by about 6 months only. The delay is not "undue" under O 53 r 4(1), having regard to the negotiations and the arrangements which the parties entered into during that time. It was not as if the applicants rested on their laurels and did nothing. Neither, in my opinion, could it be said that granting the extension of time despite the delay was likely to cause substantial hardship to or substantially prejudice the rights of the respondent or would be detrimental to good administration of the respondent's affairs. The levying of penalties for delays in payment is always open to the respondent.

[8] Further, the applicants seek relief other than certiorari so even if the 3 months time limit had expired, the rest of the application remains good because the respondents can hardly complain of substantial hardship, prejudice or detriment to its good administration: O 53 r 4(1) HCR.

[9] I would therefore grant leave to apply out of time if such was required.

THE APPLICATION FOR LEAVE TO APPLY FOR JUDICIAL REVIEW


[10] The relief sought by the applicants is as follows (and I paraphrase):

[11] Seven main grounds were put forward for the application for judicial review, most of which have been foreshadowed in the relief sought as outlined above.

[12] In Satala v Bouwalu [2008] FJSC 20; CBV0005.2006S (13 October 2008), the Supreme Court said:

Broadly speaking, judicial review is available on one or more of three general grounds: illegality (such as absence of power), irrationality, and procedural impropriety (usually a denial of natural justice): Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 410 per Lord Diplock.


[13] For the purposes of this application, it is not my duty to delve into the evidence and the merits of the applicants' case in some depth. All that I need to be satisfied with is that "the material available discloses what might, on further consideration, turn out to be an arguable case in favour of granting the relief": Fiji Airline Pilots Association v Permanent Secretary for Labour and Industrial Relations [1998] FJCA 14; Abu0059u.97s (27 February 1998).

[14] The CEO has the power under s 25 of the Tax Administration Decree to enter into the deed of settlement. I think there is an arguable case that the respondent is bound by the deed and that its officers cannot unilaterally declare it null and void, act arbitrarily, act against the rules of natural justice, act in breach of the applicants' legitimate expectations or otherwise act in breach of the terms of the deed. It is also arguable that there had been no breach of the deed by the applicants.

[15] I am satisfied that the background facts as outlined above discloses an arguable case. I therefore grant leave for the applicants to apply for judicial review of the respondent's decision to repudiate the deed of settlement dated 9 July 2010.

[16] The applicants have asked for a stay of the respondent's decision to treat the deed of settlement as null and void. That this Court has the power to stay a decision of an officer of the State in judicial review proceedings is well settled: State v Minister of Immigration, ex parte Kaisiepo [1996] FJHC 177; [1996] 42 FLR 26 (8 February 1996) and permitted by O 53 r 3(8) HCR. I therefor grant a stay of all actions by the respondent in respect of the deed of settlement or the matters contained therein until further order or final determination of the application for judicial review.

THE ORDERS


[17] I therefore make the following orders:

Sosefo Inoke
Judge

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